Industrial Distribution Q&A with CEO Doug Braun

Stockholm-based International Business Systems (IBS) is a leading global integrated ERP and supply chain provider. Thousands of customers in over 40 countries rely on IBS for world-class solutions to drive dramatic improvements in their operations. IBS operates Dynaman, an advanced warehouse management solution and Bookmaster, a leader in ERP technology for publishing. Doug Braun, the new CEO of IBS, came to the company from software provider RedPrairie in May of 2012. Industrial Distribution had a chance to speak with Doug on his new role and what he sees as the trends going forward in 2013 in the distribution software industry. For more information, visit www.ibs.net.

ID: Tell us about your new position, or why you made the switch to IBS from RedPrairie?

I came to IBS in May of last year. The current CEO at RedPrairie was essentially my age and in the same career spot as I was. Five years into the role, he didn’t see himself leaving anytime soon, so that left me with a situation where I said, “If an opportunity comes along, I am going to explore it.” At RedPrairie I had reached a ceiling and I had always wanted to run my own company. IBS was an opportunity to do exactly that, so it was a positive transition for me and for RedPrairie. I had been based internationally for the last eight or so years, and part of my requirement in a new position was to retain that international position. IBS allowed me to retain that.

ID: What are the differences in strategy from RedPrairie’s product offerings and IBS’s?

We are fairly different. IBS really has a few main product sets.

We have an ERP solution, like an SAP or Epicor, this includes CRM and other modules. We have two ERP Solutions: one is focused on the publishing and electronic publishing industry, which we call Bookmaster, and then we have our distribution ERP solution called IBS Enterprise. That is how the company launched was with an ERP solution called Enterprise for the wood industry back in 1978.

The one commonality that IBS would have with other supply chain players is that we do have a best-of-breed WMS solution. Companies like Manhattan Associates and RedPrairie have had them for years. When I came to IBS I was thrilled to find out that our WMS is as deep and broad as those best-of-breed WMS programs that I had worked with previously. IBS is primarily a European based solution set with about a hundred installs in Europe. We did a launch in November of our IBS Dynaman product, and it has been well received in the U.S. We expect to grow the WMS market for IBS in the U.S.

We also have a unique financial, sales, and operation planning, or FS&OP product, which is unique to us as a company. It allows our customers to use a tool in a very sophisticated way that will take into consideration both historical and future trends to predict the proper amount of product to order and predict the needs of the end user. That can be in terms of where the product goes geographically, how to move product through the supply chain. Those are the four key products for IBS, and only one overlaps with RedPrairie. We are both software companies. My experience of thirty years with software prepared me well to enter IBS and the global software business.

ID: What is your vision for the company here in the next year or few years?

From an IBS standpoint, we have hired many new executives in the last year. Our COO and CFO have remained the same, but a few others are just really settling into their roles. We do however have a strong executive team and we know how to deploy software globally and know how to target specific markets to gain market share and really become the best-of-breed leader in those verticals.

Part of our strategy is working with the regional GMs of each of our territories in the Americas, Europe and Asia to reach targeted markets for us: pharmaceutical, warehousing and distribution, food and beverage, automobile and automobile parts. We said as a company that we are going to own those verticals. We are going to go out and be the best and be the standard, the experts to know in those verticals, and as such we are going to capture market share. We do have people that have been thirty years with our company and in the industry, and we are starting to utilize that to help us gain market share. One of our strategic movements is that we have defined our markets and will do whatever we can to own those markets.

The second thing that we feel is pretty important is our new launch, Dynaman. Dynaman is a best-of-breed WMS and has depth and functionality. The beauty of what we have is preconfigured solutions within those verticals. We have a lower price point, and a solution ERP that is hostable. We are in the supply chain execution market, which has been difficult to break into the hosting arena with enterprise WMS. Customers in the past haven’t been willing to give up and turn over their solution set to a vendor because of the mission critical nature of the solutions. Now, they are willing, and we are hostable through all of our products, especially Dynaman. Our key focus in 2013 is growing our Dynaman base and we expect to do that really strongly in the U.S.

Our third strategy is to expand our partner network. A lot of software companies, and I have seen this in the past, is that you get a partner network that is really opportunistic. That is not really a good partnership network. It tends to be hit and miss. We are actually now creating a holistic strategy around partners which includes training, marketing dollars, partnerships around services and implementation, and long term support and care for our customers. Realizing that we can’t be everywhere in the globe, and yet our products are really demanded around the globe, we are signing partners today who we believe are long-term viable and are willing to invest in the partnership and help us grow into geographies in which we don’t have people on the ground.

Those are our three strategies as we move in to 2013, and we feel very comfortable in working through them.

ID: What are some of the new trends in the ID marketplace going into the New Year?

There are a couple of key trends I see happening. One is that I see the concept of moving to a cloud-based solution for WMS in the next one to three years. Companies like Nike and Kraft and Keebler traditionally have large IT infrastructure and they buy software, but plug it into their own data site. We are seeing the trend today where companies are moving more towards a hosted solution. Not subscription pricing, but true hosting in a cloud solution. If companies aren’t capable of providing this, they are going to be left behind. IBS is a company that has the solution offering today, that has the ability to host large volumes, and has done so in the past. We expect to continue to drive forward in this area.

I see a very strong movement towards the continuity of solutions sets. In the supply chain market it is critical that solutions are interconnected. Our solutions are unique in their ability to talk to each other. A lot of companies have bought best-of-breed solutions from different vendors, and the systems might talk to each other, but they don’t really action each other and that is the difference. Tomorrow’s world, over the next three to five years, what will happen is that when a CRM module is updated, it must automatically cast an action into all the other pieces of the solution to take care of a transaction simultaneously. We don’t have that today because we don’t have integration between systems. We don’t have actionable calls to events built in. When an event happens, it will cause a What-If analysis and affect the other systems automatically and without human interaction. IBS is on a good path to connect our systems that way. Our Dynaman product talks to our ERP product, but we are certainly always looking to improve that outside of our footprints also.

Third, and as important, is that the WMS market itself is shifting to a consumer driven world. The consumer has a funny way of telling you how they are going to purchase software or product. The functionality today of delivering pallets one at a time is really going to be left behind fairly quickly. Warehouses of the future are really going to be a piece-pick setup or maybe small case quantities as we have less brick and mortar stores and more internet ordering. This will change how the supply chain works. If you think back, supply chains really delivered based on the push system. Manufacturers would make products; push them out to the supply chain. Now, it has become a pull system, where stores, and ultimately the consumer, are pulling data and products and really changing the supply chain. In the next three to five years, this type of consumer driven model will really proliferate the supply chain.